Compensation limits for pensions (retirement savings)

The compensation limit which applies to your pension will be dependent on the way your pension has been invested.

Deposits

If you choose to deposit your pension funds in a bank, building society or credit union you are protected up to £85,000 per person per firm.

Investments

If you choose to place your pension funds directly in investments (other than insurance products), you are protected up to £50,000 per person per firm. This limit will also apply if your claim involves the mis-selling of a pension.

Retirement income

If you are already drawing a set retirement income from your pension pot from a life insurance contract, such as an annuity, your income is protected by FSCS to 100% if anything happens to your provider.

Pension Life Savings

If you are still building up your pension pot, 100% of your pot will be protected if it's directly managed under a life insurance contract. This would include personal pensions and stakeholder pensions, but not defined-benefit workplace pension schemes, which may be instead covered by the Pension Protection Fund.

Investment Life Policy Savings

These are long-term life insurance policies which have a savings element, such as endowment policies or investment bonds. Any investment life policy savings you hold are protected up to 100% with no upper limit.

Death or Incapacity

FSCS will pay your claim to 100% if it arises from death or incapacity, if anything happens to your provider.


Jargon Buster

Credit union

a financial co-operative which is owned and controlled by its members.

Deposits

money placed in a bank or similar institution to earn interest or for safe-keeping.

Investment

a financial product in which money can be invested to earn interest or profit (although the value of investments can go down as well as up).